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Tag Archive for tax penalties

How Much Will The Streamlined Procedures Penalty Cost?

Venar Ayar - Streamlined Process

The miscellaneous offshore penalty under the Streamlined Procedures is five percent of the highest aggregate account balance during the disclosure period. A number of factors can influence exactly how this penalty will be calculated in your case.

Asset Balances That Are Counted

The balances in all of your foreign financial accounts will generally be counted for the penalty calculation. The year-end balances will be reviewed and the highest aggregate balance will be used to determine your penalty amount.

Any asset that should have been reported will count for these purposes. Even if assets were reported on an FBAR, but the income from these accounts wasn’t reported on your tax return, they will also be counted for the penalty calculation.

Simply find the highest aggregate account balance and multiply it by five percent to determine your penalty amount under the Streamlined Procedures. This is the penalty that applies to domestic taxpayers.

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Hardship Exemption Rules For Not Having Health Insurance Eased

Chuck Woodson, tax penalties, Healthcare, The Tax Cuts and Jobs Act, tax reform

The Affordable Care Act (Obamacare) included a “shared responsibility payment,” which in reality is a penalty for not having health insurance. Along with this penalty came a whole slew of exemptions from the penalty, including some that were designated as “hardship” exemptions. However, the hardship relief from the penalty required pre-approval from the government health insurance marketplace, which required the applicant to provide documentary evidence of the hardship. Once approved, the applicant was issued an exemption certificate number (ECN) that needed to be included on the individual’s tax return to avoid the penalty.  Read more

Tips To Avoid Tax Penalties For 2017

With the arrival of the holidays, we are thinking about family get-together’s, holiday gifting and parties. But right behind the good times is tax season. Before you get busy with holiday festivities, take the time to consider a couple of things you can do now to avoid or reduce potential penalties on your 2017 tax return.

Underpayment Penalty

If you are a wage earner, you may not have had enough income tax withheld from your paycheck to meet your tax liability for the year. Or, if you have wages and also have taxable income from other sources such as investments, a second job or a side business, or if you are married and your spouse is also employed, your withholding for the year may not be enough to cover your 2017 tax liability. Read more

FBAR Reporting For U.S. Expats With A Foreign Business

FBARs (Foreign Bank Account Reports) have been a filing requirement for Americans with financial accounts overseas that meet the criteria since the Bank Secrecy Act of 1970. It has only been enforced for the last few years however, since the 2010 Foreign Account tax Compliance Act (FATCA) obliged foreign financial institutions to pass details about their American account holders to the IRS. Currently around 300,000 foreign banks and other financial firms are doing this. Read more

Reasons Not To Worry If You’re Behind With Your Expat Filing

There are lots of scare stories going around about the possible consequences for not filing U.S. taxes as an expat. You may have heard for example about U.S. passports being revoked, sizable FBAR penalties, and banks closing expats’ accounts because of FATCA. So if you’re an expat who’s behind with their U.S. tax filing, you may well be at least a little bit concerned. Read more

U.S. Culture Of Penalty And Inflation

John Richardson

The purpose of this post is to explore how inflation results in the facilitation of enhanced penalty collection in America today.

What is inflation? “Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. Under conditions of inflation, the prices of things rise over time. Put differently, as inflation rises, every dollar you own buys a smaller percentage of a good or service. When prices rise, and alternatively when the value of money falls you have inflation.” Read more

Paying Taxes on Household Helpers

If you employ someone to work for you around your house, it is important to consider the tax implications of this arrangement. While many people disregard the need to pay taxes on household employees, they do so at the risk of paying stiff tax penalties down the road.

As you will see, the rules for hiring household help are quite complex, even for a relatively minor employee, and a mistake can bring on a tax headache that most of us would prefer to avoid.

Commonly referred to as the “nanny tax”, these rules apply to you only if (1) you pay someone for household work and (2) that worker is your employee.

Household work is work that is performed in or around your home by baby-sitters, Read more